Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Black Iron (TSX: BKI) announced this week that Ukraine’s Ministry of Defence has developed a plan to transfer to another area the parcel of land originally sought by the company as the location of a processing plant, tailings and waste rock for its Shymanivske iron ore project.
In a press release, the Toronto-based company said the parcel of land proposed by state officials in September 2018 was deemed unsuitable from a social and environmental standpoint, whereas the newly proposed parcel of land is considered to be ideal.
The estimated cost for relocating these facilities is already included in the PEA.
This proposed tenement, surrounded by operating iron ore mines owned by ArcelorMittal and Metinvest, is owned by Ukraine’s central government and is currently being used by the ministry itself for training purposes.
Black Iron said that it is only seeking a portion of the land held, which is located adjacent to its Shymanivske ore body.
The Canadian firm also said that to secure the rights to this land, management needs to finalize discussions with the Ministry regarding a compensation package the company expects will entail the construction of new barracks and replacement of facilities that will need to be relocated.
According to Black Iron, the estimated cost for relocating these facilities is already included in the $436 million estimated for capital costs in the preliminary economic assessment for the project.
The Shymanivske iron ore deposit is located 330 kilometres southeast from Kiev in central Ukraine, in the heart of the KrivBass iron ore mining district.
The 646Mt measured and indicated resource @ 31.6% iron and the additional 188Mt inferred resource @ 30.1% iron, which will be concentrated to ~68% iron, is defined by approximately 37,000 meters of historical drilling.
Black Iron said initially, the project is supposed to produce 4Mtpa of ultra high-grade, low impurity, 68% Fe concentrate with expansion to 8Mtpa starting in the third year of production, and operational by year five.
